Asian Stocks Drop on Growth Concerns

Tuesday June 16, 2009

Asian stocks fell, sending the MSCI Asia Pacific Index down the most in a month, as commodity prices declined and investors questioned the pace of the economic recovery. The yen strengthened and Treasuries rose.

PetroChina Co., China’s biggest oil producer, sank 4.2 percent in Hong Kong and Rio Tinto Group, the world’s third- largest mining company, lost 3 percent in Sydney as oil and copper fell. Toyota Motor Corp., the No. 1 automaker worldwide, fell 3.4 percent after a New York manufacturing report missed estimates. Asia stocks extended a global slump that dragged the MSCI World Index down by the most in two months yesterday.

“Some may have believed that the deterioration of the global economy had ended, but that’s not the case,” said Kiyoshi Ishigane, a senior strategist at Mitsubishi UFJ Asset Management Co., which oversees about $52 billion in Tokyo. “Those who bought stocks on a perception the economy would improve are now selling on reality.”

MSCI’s Asia index retreated 1.6 percent to 101.92 as of 3:05 p.m. in Tokyo, the biggest drop since May 14. The gauge has surged 44 percent from a more than five-year low on March 9 amid speculation the global economy is recovering. The index trades at 23.4 times estimated earnings, compared with 14.5 for the Standard & Poor’s 500 Index in the U.S.

Japan’s Nikkei 225 Stock Average fell 2.9 percent to 9,752.88 even as the central bank raised its assessment of the economy for a second month. The Bank of Japan left its benchmark overnight lending rate unchanged at 0.1 percent. Hong Kong’s Hang Seng Index slumped 3 percent.

(Bloomberg)